September 16, 2008

Absolut Scales Back Flavoured Roll-Outs

By Bokaie, Jemima

Pernod Ricard plans to dilute a drive to launch flavoured variants of vodka brand Absolut, following its acquisition of the brand through its euro5.6m (Pounds 4.4m) purchase ofVin & Sprit from the Swedish government in April. Instead of adding one flavour every six months, the drinks giant said it will now do so only every one or two years. Its marketing activities, meanwhile, will focus on its original blue variant.

The change in strategy comes weeks after Diageo said it is extending Smirnoff into flavoured vodkas in the UK for the first time.

Lime Smirnoff and Green Apple Smirnoff will be trialled in bars in Bristol for about six months before launching as part of the Smirnoff Twist range, introduced in 1997 in the US.

According to Pernod Ricard managing director Pierre Pringuet, each additional flavour of Absolut was cannibalising existing ones, especially in the on-trade, where bartenders had insufficient space to display all the variants. He confirmed that 'everything will be focused on the mother product'.

Absolut sells about 11m cases a year, 5m of which are accounted for by the US market. It is losing share across the Atlantic, amid competition from fashionable rivals such as Bacardi's Grey Goose.

Economic slowdown is expected to hit Absolut globally, because of its premium positioning. Both it and Smirnoff face competition from Polish brand Wyborowa and Russian vodka Stolichnaya.

Vodka recently overtook blended Scotch whisky to become the UK's bestselling spirit in the off-trade for the first time in generations, helped by its popularity with younger drinkers and the influx of Eastern Europeans.

Absolut: focus on original blue as flavours introduced gradually

Copyright Haymarket Business Publications Ltd. Aug 13, 2008

(c) 2008 Marketing. Provided by ProQuest LLC. All rights Reserved.